What Makes Farmers Record Farm Financial Transactions? Empirical Evidence from Potato Farmers in Indonesia

Abstract

Financial recording is still difficult due to the limited knowledge of farmers, whereas financial recordings are crucial for producing important reports for business development. This study aims to analyze the factors related to farmers’ activity in recording farm finances and the impact on farmers’ production and income. The study was carried out in West Java and included 200 potato farmers in the Garut and Bandung Districts. Factors related to the farmers’ experiences recording farm finances were investigated using logistic regression analysis. The results of this study showed that the significant factors related to farmers’ activity recording farm finances are the farmers’ education, their participation in the training of financial records, and their experience in obtaining finance from farmers’ associations, traders and agricultural input kiosks. Furthermore, this study also showed that recording financial transactions in agricultural business can increase farmers’ production and income. This study provides insights to policymakers and financial providers, showing the need to provide farmers with assistance in financial recording.